FCA chief executive Andrew Bailey said: "Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity."

"We have listened to all the feedback we have received and believe that the steps we are taking are the right ones. We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers."

The watchdog said it would consider a further period consultation and feedback on the proposed changes, which will close on 11 October.

If the FCA proceeds with its proposals, it is anticipated that the rule setting the PPI complaints deadline would come into force by the end of June 2017, with the consumer communications campaign also starting at that time. Consumers would then have a final two years to make claims, with the deadline falling in June 2019.

In the meantime, the regulator is advising people who are unhappy about PPI, to complain to the firms concerned and to the Financial Ombudsman Service if they are not satisfied with the response.

PPI policies were sold by the industry alongside loans, and was meant to help repay some or all of their borrowing if they lost their income for a period in the event of an accident, become sick or unemployed.